Party Chairman Lord Feldman denies calling Party members “mad, swivel-eyed loons”
Andrew Feldman has issued a statement as follows: "There is speculation on the internet and on Twitter that the senior Conservative Party figure claimed to have made derogatory comments by the Times and the Telegraph is me. This is completely untrue. I would like to make it quite clear that I did not, nor have ever described our associations in this way or in any similar manner. I am taking legal advice."
The question that obviously follows is whether some other person with "strong social connections to the Prime Minister and close links to the party machine", as the Times (£) put it this morning, spoke the contested words. This seems not to be the case, and Lord Feldman's statement confirms that he is indeed the man at the centre of this controversy. I understand that a conversation between him and several lobby journalists took place at a dinner earlier this week.
As far as Conservative MPs and activists are concerned, a certain amount depends on their view of Lord Feldman. My own view is there should be a single Party Chairman who sits in the Commons. Lord Feldman isn't an MP, but is a friend of the Party leader. Both these factors rendered his original appointment unsuitable, since CCHQ should have a degree of distance between itself and the leadership.
That said, Lord Feldman has always got favourable ratings from most MPs I've spoken to, and I think he's very able. One senior source I spoke to earlier this afternoon, who isn't always supportive of the Prime Minister, said that he has been impressed by the way in which Lord Feldman has taken to his work and that he has acquired a deft political touch. I believe that Cabinet Ministers and other Ministers will rally round him.
None the less, there is a problem at the heart of this story, and it was touched on by my colleague Mark Wallace, who tweeted that the "most damning element of the "swivel-eyed loons" story is all Tories find it immediately believable". Quite so - as I made clear myself in the Times. Three senior Ministers and one senior backbencher told me today that in their view some people in Downing Street, and some other Ministers, have a very low opinion indeed of party activists.
Number 10 will doubtless be calculating that Ministers will back Lord Feldman, and that any protests from local Associations and MPs will quickly run their course. None the less, Downing Street and the media have a new casus belli. And one thing's for certain amidst the fog: David Cameron will not - absolutely not - want to lose his Party Chairman and friend. That would be a heavy blow to a vulnerable Prime Minister at the end of a turbulent week.
4.30pm Update The Telegraph is standing by its story. See below (plus the view of Tim Mongomerie: